However, it was decided to maintain the same rating due to “limited access to credit, weak governance and a history of recurring debt restructurings.” Meanwhile, the “stable” outlook was maintained; which implies that for Moody’s it is unlikely that credit conditions in general “improve materially”.
In the same way, “Expected losses remain in line with those associated with a Ca rating,” the agency explained. He also described inflation as a “perennial” problem, and projected that the index will total 85% this year and 80% in the next.
Regarding reserves, the rating agency highlighted that they have risen by US$1,000 million since the beginning of the month “after the government’s announcement granting more favorable conditions to certain exporters,” referring to the so-called “soybean dollar.”
In this way, the total number of reserves, according to Moody’s, reached US$37.6 billion, although it pointed out that the net reserves are “less than $2 billion” if “certain private sector deposits, currency swaps and other bilateral loans” are removed.
Argentina has maintained the Ca rating since April 2020, at the beginning of the Coronavirus pandemic, at which time the agency assigned a “negative” outlook, which was raised to “stable” in September 2020 after the public debt swap under law foreign.
Previously, in August 2019, after the decision of the Mauricio Macri administration to declare the granting of payments of short-term securities in pesos, the rating agency lowered the note from “B2” to “Caa2”.
Source: Ambito
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